VALUE OF FRANC

Waikato Times, Volume 122, Issue 20492, 7 May 1938, Page 7

VALUE OF FRANC

DEVALUATION IN FRANCE I ANGLO-AMERICAN APPROVAL j i STATEMENT BY’ SIR J. SIMON ; t Official Wireless) RUGBY. May 5. A statement on the devaluation of the franc was made by the Chancellor of the Exchequer, Sir John Simon, during question time in the House of Commons to-day. ‘‘At the beginning of the week Hie French Government informed us," the Chancellor said, "that it did not consider it possible that the franc could be maintained at its then level, and that it was contemplating a lower rate. The French Government sent a similar communication to Hie United States, and as is provided In the Tripartite Agreement, consultations between the three Governments then took place. "The French Government has given an assurance that it is its intention to ! achieve', as an eventful result of its N policy, a rate corresponding to the i economic position, and giving to France ; no competitive trade advantage, and j: that the present downward movement j' would be the last. Continuation or Agreement “In these circumstances, after consultation with America and in agreement with America, we reached ih * conclusion that the action being taken by France should be' regarded as not inconsistent with the Tripartite Agreement. That agreement, in the view of all three Governments, continues with full force and effect." Sir John Simon was then asked if the Government contemplated that no further approval should be given to the unilateral devaluation of the franc or dollar. "We will deal with the situation as we find it," Sir John Simon replied. , "The honourable gentleman has referred to the dollar. As [ have seen in the newspapers a wild rumour suggest- j mg there might he a lowering iri the : Talue of the dollar, may I take this 1 opportunity of saying that it has been officially denied in Washington. Equally, of course, we are not contemplating any adjustments of the i sterling exchange."

A PANICKY DEMAND FLOOD OF RETURNING CAPITAL HOARDERS STORM OFFICES United Press Assn.—Elec. Tel. Copyright (Received May 7, 1.10 pm.) LONDON, May 6 The Paris correspondent of the Daily Telegraph says the Hood of returning capital lias become overwhelming. It is impossible to cope with the demand for francs, which is assuming a panicky character. Small hoarders stormed the offices of money-changers and were glad to take 177 for sovereigns, sterling and notes. The official rate was held at 178.40 only by active and firm intervention by the Equalisation Fund. Profit-taking checked a boom on the Bourse,. Nevertheless, rentes, in which most holders of foreign currencies are investing, rose further, reducing the yield from national defence bonds from 4 to 3£ per cent.

ANGLO-AMERICAN ACTION DEMOCRATIC UNITED FRONT CURRENCY WAR AVOIDED United Press A&sn.—Elec. Tel. Copyright NEW YORK, May 5. Although Britain and the United States were opposed to the step at first, they acted quickly together to assent to the new devaluation of the franc in order to present a democratic united front against the Romc-Berlin axis meeting in Rome, says the Washington correspondent }f the New York Herald-Tribune. The collapse of the' franc would have brought about a disruption of trade with Britain, the Unite 1 Slates and France, and would have plunged them into a currency devibittion war, which would have played into the hands of the dictators.

Such an •occurrence would have threatened France’s projected defence programme, whi’h is regarded c.s a buttress to the democratic stability of Europe.